4 elements to help you understand a product membership system

If a product wants to continuously obtain user value, front-end growth and back-end activity, retention and conversion are all indispensable.

As traffic becomes more and more expensive and the cost of attracting new users becomes higher and higher, most Internet companies have begun to regard user activity and retention as core product indicators, and the membership system has always been one of the most effective operational means of active retention and conversion .

This article compares the tiered membership systems of four typical paid products: JD.com, Atour, Alipay, and Tencent Wealth Management, which represent four different types of tiered membership systems. Quickly understand the membership system of a product from the four core elements of the membership system: naming, number of levels, growth value calculation, and member benefits .

I hope this article can give you some inspiration if you are scratching your head while building a membership system.

1. Membership naming and tiers

The naming of members reflects the brand culture and user group characteristics, while the number of membership levels reflects the length of the product conversion path.

1. Overview of membership nomenclature and tiers of the four products

JD.com members are divided into two systems: non-paying members (hereinafter referred to as tiered members) and paying members. In order to highlight paying members, starting from September 15, 2019, the original bronze, silver, gold and diamond membership system for graded members will be cancelled and replaced by Jingxiang Value.

So far, from the perspective of member naming, JD.com’s members only have two names: paid members and tiered members. Tiered members are distinguished by the size of their JD.com value, and are divided into 5 levels in total.

The naming of Atour members fully reflects the brand feature of "comfortable smile". Membership is divided into 5 levels, namely registered member (first encounter), silver member (knowing the master), gold member (confidant), platinum member (holding hands) and black gold member (free and easy). The short names in brackets correspond to two lines of poetry respectively. For details, please see the membership introduction on the official website.

Alipay membership is divided into four levels: mass membership, gold membership, platinum membership and diamond membership. In terms of the number of levels, Alipay membership has one less level than the former, and the difficulty of membership upgrade has also increased.

Tencent Wealth Management membership is divided into four levels: ordinary member, silver member, gold member and platinum member. In terms of color differentiation, the colors from low to high are blue-gray, silver-gray, gold, and black. The gray tones are used to create a sense of seriousness and professionalism in financial products.

Note:

※ Level membership means that the membership level cannot be purchased directly, but is achieved by completing product tasks and upgrading.

※ Paid membership refers to users who purchase membership privileges through payment. It is independent of non-paying membership and is not a certain level of non-paying membership.

2. Member naming and layer analysis

Usually, members are named based on metal, with gold, silver, diamond, etc. being the most common. This is a naming method that users are already familiar with. Following the above rules will help users accept membership more quickly.

If the product has a special brand culture and target users, you can consider adding brand elements to the name, such as Atour.

There is overlap between paid members and tiered members.

High-level memberships distracted users from paying memberships, so JD.com eventually had to remove members from the membership system.

Paid membership will inevitably lead to the weakening of the influence of the original hierarchical membership system. During the initial design, it is necessary to comprehensively consider the value of paid membership and hierarchical membership systems in maintaining users, marketing behavior, etc., and make good choices.

In addition, you can also refer to the practice of Atour Hotel and sell a certain level of membership as a paid object. As shown in the figure below, Atour Hotel sells the third level [Gold Member] in the membership system separately.

Different products have different membership tiers.

Membership for paid products such as e-commerce generally adopts a 4-5-level stratification, and the membership system for information products can be as high as 10 levels, such as Qutoutiao. Social and gaming products even have dozens of membership levels based on different gameplay.

The number of membership levels mainly depends on the length of the product's conversion path.

The conversion path for paid products is short, and users will definitely pay if they use the products. Therefore, it is only necessary to stratify users according to their actual spending power. 4-5 strata can cover all the spending power of users.

However, the conversion path for social products is long, and users need to be active in the product for a long time to have a chance to be converted into paying users. There needs to be enough membership levels to ensure that users are motivated to remain active and retain.

In addition, from a cost perspective, membership benefits for paid products are usually discounts and rebates from merchants. The higher the membership level, the higher the cost to the company. Too many levels will make it difficult for the company to bear the costs. The membership benefits of social and gaming products are usually virtual medals, status symbols, etc. Even if the membership level is as high as dozens of levels, it will not incur excessive costs.

The picture below shows the benefits of a level 10 member of Qutoutiao. It can be seen that most of the benefits are virtual rewards such as medals of honor, and the company hardly needs to pay any cost.

2. Growth value calculation

Growth value is a scale used to measure membership level. Users can achieve the purpose of upgrading or maintaining their membership level by obtaining growth value. The way to obtain growth value reflects the main operational actions of the product, and the calculation formula also varies according to the speed of business changes and product characteristics.

1. Factors included in the calculation of JD.com members’ growth value

• Calculation period: 30 days;
• Products covered: JD.com and JD Finance
• Behavior: consumption, activity, reputation, etc. See the figure below for details. Behaviors that require consumption have been specially marked;
• Calculation method: Black box, the detailed formula for calculating the growth value is not displayed to the public.

JD.com’s main operational actions include the following aspects: increasing user consumption, promoting user activity, collecting user information, establishing a credit scoring system, etc.

The specific calculation formula for JD.com’s growth value is not clearly given, so it can be inferred that its business adjustments are fast and the fluctuations are large. Not publishing the specific calculation formula allows for flexible adjustment of the growth value calculation formula, but it also sacrifices the user's deterministic experience.

2. Factors included in the calculation of Atour members’ growth value

• Calculation period: the last 12 months;
• Products covered: Atour;
• Booking channels: Booking through Atour APP, WeChat applet, customer service hotline, corporate account and other channels;
• Behavior: consumption, tasks (completing information, completing orders);
• Calculation method: White box, the growth value includes payment amount, room nights stayed, and task completion, and the calculation formula is clear.

Yaduo's main operation direction for users is consumption and interaction, and its operations mainly revolve around room booking and related services.

Growth value calculation is compatible with regional differences: hotel business is usually distributed in multiple cities, and the consumption levels in each city vary greatly. If membership levels are measured solely by the amount of consumption, most senior members will be concentrated in high-consumption cities, making it impossible to incentivize users in second- and third-tier cities. Therefore, the growth value of hotel industry members is usually calculated based on room nights and consumption amount.

Hotel reservations are more dependent on user channels, including OTA (Meituan/Ctrip and other platforms), self-operated channels, distributors, etc. Different channel companies pay different costs, and the membership system usually only calculates the growth value for users of self-operated channels, such as Atour.

3. Factors included in the calculation of Alipay members’ growth value

• Time: the last 12 months;
• Product: Alipay;
• Behavior: consumption and shopping, payment of living expenses, and financial management;
• Calculation method: White box. The growth values ​​that can be obtained from all behaviors are clearly specified. Please see the figure below for details.

Alipay’s main operational activities include promoting user consumption and shopping, completing daily life payments and increasing financial management. The growth value rewards for daily life payment tasks are relatively high, and it can be inferred that occupying the user's daily life payment scenarios is the main operation direction.

Alipay's growth value calculation formula is a white box, which is related to the nature of financial products. Since it involves the user's financial investment, it is more necessary to gain the user's trust. A clear calculation method can give users a sense of certainty.

4. Factors included in the calculation of the growth value of Tencent Wealth Management members

• Time: the last 30 days;
• Product: Wealth Management Platform;
• Behavior: Purchase financial management, member tasks (complete personal information and achieve financial management goals)
• Calculation method: White box, see the figure below for details.

The main operational actions of Tencent Wealth Management include promoting users to purchase financial products and motivating users to improve their personal information. Tencent Wealth Management has as many as 27 membership tasks, and tasks involving collecting user information account for one-third of them. This shows that improving user portraits is the main strategy of the product.

The calculation formula for the growth value of Licaitong members is also a white box, which clearly shows the growth value that users can obtain by completing tasks.

III. Membership Rights

From the user's perspective , membership benefits are the driving force for users to remain active and stay within the product. A good membership system should have outstanding core benefits, and the core benefits must be able to meet the core demands of users in using the product.

From the perspective of the enterprise , the rights and interests of the membership system should form a good business closed loop. The rights and interests can promote users' repeated consumption and tap the users' surplus value as much as possible.

1. JD.com membership benefits

From the perspective of core rights and interests : JD.com’s membership has after-sales service as its core privilege. The higher the membership level, the more comprehensive the after-sales service they enjoy. This shows that the target users of JD.com’s tiered membership system pay more attention to after-sales service, which is the main reason for long-term user retention.

From the perspective of a closed business loop : JD.com’s membership system privileges strengthen its after-sales capabilities, provide protection for users’ purchases, and improve user satisfaction. Combined with JD.com’s paid membership, we can form a closed business loop and promote user repurchase.

2. Composition of Atour Members’ Rights and Interests

Note: The digital mark indicates the user level, where senior members have all the rights and interests of lower-level members.

From the perspective of core rights and interests : Yaduo’s membership rights and interests basically revolve around accommodation needs, and its core rights and interests are consumption discount rebates, covering all members at levels 1-5. It can be seen that the core demand of users of hotel products is still higher cost-effectiveness.

From the perspective of the business closed loop : Atour Hotel has a total of 20 membership rights, including preferential rebates, accommodation experience, food, service and identity display, which almost cover all scenarios of user accommodation. The closed business loop with membership benefits centered on preferential rebates and a variety of services to enhance user experience can effectively promote users' second ordering behavior.

3. Alipay member rights and interests

From the perspective of core rights and interests : the rights and interests of the Alipay membership system cover a variety of scenarios related to users’ food, clothing, housing and transportation. The core privilege is that members can enjoy membership privileges in merchant mini-programs within Alipay. It meets the users' needs for food, clothing, housing and transportation as members on Alipay.

From the perspective of a closed business loop : Alipay membership benefits have attracted merchants’ mini-programs, promoted the development of Alipay mini-programs, and enabled users to consume within Alipay mini-programs in all scenarios of food, clothing, housing and transportation, thus completing Alipay’s closed payment business loop.

4. Tencent Wealth Management Member Benefits

Tencent Wealth Management membership level benefits are as follows:

From the perspective of core rights and interests : Tencent Wealth Management membership rights basically revolve around users' financial management behavior, and the core rights and interests are fund flow privileges. Including turnover, repayment, deposit and withdrawal, etc. The core demand of users within the product is to complete the flow of funds more smoothly.

From the perspective of business closed loop : Tencent Wealth Management membership benefits provide users with smooth capital flow rights, so users can invest and manage their finances within the product with greater confidence. At the same time, the level benefits of Wealth Management mainly focus on providing high-end service rights and interests for platinum members and above, forming a business closed loop with member rights and interests, and promoting user activity and retention.

IV. Conclusion

By analyzing the four core elements of the membership system: naming, number of levels, growth value calculation, and member rights, you can quickly understand the membership system of a product.

A good membership system can provide membership benefits that meet the core needs of users by selecting appropriate membership names, setting membership levels that match the product conversion path, and designing a growth value calculation system that covers major operational actions and can be flexibly adjusted. Ultimately, a closed business loop is formed, guiding the gradual improvement of user value and maximizing user value.

Author: Cui Chuang

Source: Everyone is a Product Manager